Treasury spotlights AI risks for financial sector

The Treasury Department issued a report on how the financial services sector can manage cybersecurity risks posed by artificial intelligence technologies.

Details: Developed in response to an executive order, the report outlines steps for addressing AI-related operational risk, cybersecurity, and fraud challenges. It includes recommendations on issues such as:

• Addressing gaps between financial institutions related to in-house AI systems, data available for training models, and human capital.

• Regulatory and international coordination.

• The explainability of advanced machine learning models, particularly generative AI.

Agency Views: The Cybersecurity and Infrastructure Security Agency and other national and international agencies earlier this year released joint guidance on using AI systems securely, while the OCC last year cited AI as an emerging risk.

ICBA Advocacy: ICBA recently offered recommendations for an Office of Management and Budget proposal to establish AI governance standards for federal agencies. In a comment letter to the OMB, ICBA said federal banking agencies must ensure their use of AI is based on agreed upon public-private standards to ensure trust and protect community banks and their customers.

ICBA Resources: Recent ICBA blog posts separate AI hype from reality and spotlight what regulatory perceptions of AI will mean for community banks. ICBA separately offers its AI Demystified webinar series as a bundle that community banks can purchase to view on-demand.